How to Test Your Online Product before It’s Even Made – Part 2: The Two-Phase Process

By Pat Flynn on December 2, 2009

This is Part 2 of the “How to Test Your Online Product Before It’s Even Made” series.

In Part 1, we discussed how we can make sure a market exists for our product. Here in Part 2, we’re going to dissect the nature of our product, and prepare it in a way so that we’ll be able to gauge exactly how it will be accepted once it enters the market.

Your market can tell you exactly what they want. Your market can go even further to tell you that they would give you money for something you plan to offer. The brutal reality is that when the time comes to actually pay you, when it’s time for your market to pull out their wallets and enter their credit card information online, your market’s word means nothing.

People backing out of their word online is a fairly common occurrence. In person, it’s much harder to go against your word because—well, it’s done in person. But online, people seem to throw around words a lot more without actually following through.

Therefore, simply asking your email list, your Twitter followers, or your blog subscribers if they would pay for a product that you are going to create simply will not work. Many people are too nice and say they will pay, but they don’t.

So instead, you have to take some of them through a very specific funnel, which mimics the real buying process, to actually get some tangible numbers and proof that your product will actually sell. I’d like to give credit to Tim Ferriss(full disclosure – I earn a commission if you purchase) for writing about a similar “tester” sales funnel in his book, although I’ve taken it much further and have broken it down into a two-phase process. You’ll see why…

Step 2: Make a List of Your Product’s Features and Benefits

Even though this series is about how to test your product before it’s even made, you still have to have a good understanding about the product you want to create. Don’t waste your time on the name, what font you’re going to use, or what the cover will look like. That’s not important right now. The only thing you should worry about are the product’s features, and the product’s benefits.

Features vs. Benefits

No, they are not the same thing. I think every entrepreneur struggles at one point in their lives trying to make sense of the difference between the two. Here is my attempt.

A feature is a special fact about something. A benefit is what that fact can do for someone.

A feature: my house has solar panels.

The benefit: I save money on my electricity bill.

A feature: A home gym folds up and fits under the bed.

The benefit: You don’t have to waste space in your room with ugly gym equipment while you’re not using it.

A feature: My blog has a step-by-step series about how to test your online product before it’s even made.

The benefit: So you don’t have to waste your time and money completing a project that may produce less than expected results.

Which do you think is more important: the feature, or the benefit?

Have you ever heard of the expression, “What’s in it for me?” It’s basically what any customer in any niche wants to know. The features really don’t matter—it’s the benefits that they provide that do.

If you’re still struggling trying to figure out what the benefits of your product would be, here’s a super cool trick. Take any feature of your future product, and add the words “which helps you…” on the end of it, and finish the sentence. You now have your benefit. Examples:

The house has solar panels, which helps you save money on your electricity bill.

A home gym folds up and fits under the bed, which helps you save space in your room when you’re not using it.

My product has X, which helps you Y and Z.

Make a list of as many features and benefits as you can. We’ll be using this list in our later steps. I just wanted you to start thinking about it now if you haven’t already.

A Two-Phase Process

It’s fairly common to break down a sales funnel into a two phase process. In phase one, we engage with potential customers, seeking out those who would be interested in learning more. In phase two, we present the solution and our product to those people.

The reason this works so well is because by engaging with potential customers we establish a relationship with those people first, which is necessary before any type of selling should occur. Like I’ve mentioned in previous posts, you can’t just go up to someone you just met and expect them to buy whatever it is your trying to sell.

A relevant story:

About a year ago, once I started making some good money online, I decided to invest about $800 into affiliate marketing. Affiliate marketing is neat because you’re selling someone else’s product and earning a nice commission for each sale. You don’t even need a website to begin. All you need to do is send someone to a product through your own special link, and if they buy that product, you get money. Sounds good, right?

So, I signed up for ClickBank and found a number of interesting, high-commission items that I wanted to promote. I also signed up for a Google Adwords account, which would allow me to place the “hoplink” into an ad. If that ad was clicked, it would send the customer to an already prepared sales page. With Adwords, you pay only each time your ads are clicked. I was so ready to earn some easy cash.

I spent an initial $400, which was about 600-650 actual clicks on my ads (over thousands and thousands of impressions), and I didn’t even get one sale. Not even one.

Terrible.

Pathetically, I emailed Clickbank because I thought there was some kind of mistake. Hah! How lame is that? Of course, there was no mistake…except for the fact that I didn’t know anything about how to be a good affiliate marketer.

Since I had $400 left in my affiliate marketing budget, I decided to spend half of that on learning more about affiliate marketing. I bought some books, and even a couple months in a membership website, and I learned one very valuable strategy:

First, setup a “squeeze page” to capture email addresses, and THEN send those people on your email list to your sales page.

When I first heard about this, it seemed to contradict what I learned when I first started doing business online: the more pages, clicks and time it takes for a potential customer to get to your end product, the more chance there is of that person leaving during the process. So, it was weird to me that people were adding on this additional step in the process, but after some more research and discussion with others about it, it makes perfect sense.

Like I said before, it’s a way to engage customers upfront without hard-selling them anything right away. Also, when a potential customer fills out the email opt-in form, it’s like a mini-transaction that takes place, which sort of prepares that person for more information and more transactions in the future.

So, I went on the hunt for a few affiliate products that had their own squeeze pages setup already. I spent my last $200 sending clicks to the squeeze page, and wouldn’t you know, I got 6 sales. Yes, it’s only 6 sales, but at around $30 each, I nearly made up the $200 I spent on Google Adwords.

Needless to say, pay per click affiliate marketing is not for me, however, I’m really glad I spent that money to learn some valuable lessons about internet marketing along the way.

A squeeze page for an offer isn’t necessary in order to do well at affiliate marketing. As Ian mentions below in the first comment, there are people out there doing extremely well the old-fashioned way. 😉

So how does this help us?

First, it shows that we should be using a two-phase process in our sales funnel. Secondly, in our test, we can separate each part, and not move on to the next until it’s proven that we should.

In other words, we’ll test the lead capture phase first. If that doesn’t go so well, there’s no point in continuing, and we’d save a ton of time, frustration, and disappointment.

If it does go well, we know we have people who are interested in what we have to offer. We’ll then take them through the second phase, and using analytics and tracking, determine if they would actually reach the point of paying for your product. I know it sounds confusing now, but I’ll show you how it’s done in the next post.

Of course, we’ll have to test several versions of the lead capture process, (which I’ll talk about in the next post as well), so we don’t base our decision off of one “bad egg”.

I know this particular post doesn’t have as many “go here” and “click this” and “try that” as the others in the series, but I feel it was necessary to give you this background information before we actually put this stuff into action. I hope you agree.